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1994 – Prologis Goes Public

Security Capital Industrial Trust debuted on the New York Stock Exchange as SCN, priced at $11.50 a share.

SCI’s initial target market had been the Western United States. To continue its expansion, SCI turned to the stock market in 1994 for additional capital.

In 1991, Prologis legacy company Security Capital Industrial Trust (SCI) had high aspirations. The goal was to raise enough initial capital from institutional investors to gain a foothold in the Southwest, establish relationships with flourishing companies, and follow those clients wherever they might go: across the United States, into Europe and around the globe.

Founder Bill Sanders outlined a plan for converting SCI into a real estate investment trust (REIT). At the time, it was a bold strategy. In 1960, legislation was passed to help everyday Americans invest in commercial real estate via public REITs, which are traded on exchanges like shares of stock. But throughout their short history, REITs were often seen as relatively exotic forms of ownership and as a result were underutilized. By the late 1980s, they were often being used by struggling companies tapping the public market for capital as a way to remain solvent during troubled times.

Sanders, however, saw their true worth. In a business that demands capital, turning to the public markets could provide SCI with the funds it needed to pursue its ambitious growth strategy. Instead of offering the markets a troubled company, Sanders offered one built to be a REIT from its inception, complete with a leadership team skilled in running a public company and a detailed plan for large-scale expansion.

There was a wrinkle in the plan, however. In 1994, Sanders told investment bankers that he wanted to launch a relatively small IPO. His strategy was to establish an initial price and then offer subsequent rights offerings at higher prices, maximizing the amount of capital required for SCI’s growth strategy.

Investment banks objected to the plan, so SCI raised $35 million itself, with no banks involved. The strategy worked precisely as SCI had hoped it would. After debuting at $11.50, SCI watched as investors aligned themselves with the young firm.

"We immediately went on the New York Stock Exchange," said former CEO Dane Brooksher. "So we had a market for our stock. We had liquidity, and we then went about continuing to build the platform, and continuing to raise capital through the issuance of equity at ever-higher prices in the market."